Barclays has revealed details of a £4.5 billion cash-call to new and existing investors in the latest move by a bank to boost finances hit by the credit crunch.
A raft of wealthy overseas groups have pledged cash under the share placing, which will see the Qatari royal family and Japan's third largest bank among those set to become significant shareholders in Britain's third largest bank.
Existing shareholders are also being offered the chance to take-up three discounted shares for every 14 already owned under the scheme designed to boost Barclays' balance sheet.
Shares in the banking giant rose more than 6% today on the full details of its long-awaited fundraising plans, sparking gains across the sector.
Barclays has reportedly been under pressure to increase its capital reserves after so far suffering a £2.64 billion hit from the crisis in credit markets and collapse of the US sub-prime mortgage market.
A number of embattled rivals have also turned to shareholders for cash, with Royal Bank of Scotland raising £12 billion, while Halifax Bank of Scotland and Bradford & Bingley are both in the final stages of their rights issues.
But the Barclays scheme sees the bank stop short of a full-blown and deeply discounted share issue, which has been cheered in the market.
Instead, Barclays has secured a commitment from groups including so-called sovereign wealth fund the Qatari Investment Authority (QIA) to buy £4.5 billion worth of shares, with existing investors able to "claw back" up to £4 billion of the stock.
If investor demand is low, Barclays' will still raise the full amount as it has effectively been underwritten by the shareholders leading the scheme.
It named the leading groups as the QIA, which has pledged the biggest slice, at up to £1.8 billion, and Challenger - a vehicle led by Qatari royal and prime minister Sheikh Hamad Bin Jassim Bin Jabr Al-Thani and his family - with a £533 million cash injection.
Existing shareholders China Development Bank and Singaporean government-backed fund Temasek have also agreed to put in up to £136 million and £200 million respectively, with a further £1.3 billion from other institutional investors.
Barclays added that Japanese group Sumitomo Mitsui Banking Corporation will invest around £500 million by buying shares at a 4.7% discount to last night's closing price, but said the Sumitomo placing is not open to an investor claw back.
Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said Barclays was right to hold back from a full rights issue.
"Clearly Barclays' decision that patience was a virtue - as opposed to announcing a full-blown rights issue following the lead of its competitors - has resulted in a rather more measured outcome.
"Further sovereign wealth fund investment will stabilise the shareholder base, whilst allowing Barclays to shore up its capital and position it more strongly for future growth."
Barclays had been expected to launch a fundraising as concerns grew over its balance sheet, with the group understood to have one of Europe's lowest core "tier one" equity ratios - a key measure of bank balance-sheet strength - in Europe.
John Varley, group chief executive of Barclays, said half of the money raised would go towards its capital reserves, but the other half will be put towards new "opportunities".
"Through our capital raising today we strengthen our capital base and give ourselves additional resources to pursue our strategy of growth through earnings diversification," he said.
"We position ourselves to capture opportunities for new business at attractive margins in our retail and commercial banking businesses and in investment banking and investment management."
Barclays is planning expansion into emerging markets such as Russia and Pakistan, where it has recently gained a banking licence, while also stepping-up business in the US and Asia.
The group also unveiled today that it was striking a strategic partnership deal with Sumitomo, which will give Barclays Capital, the group's investment arm, and Barclays Wealth better access to retail clients in Japan.
A total of 1.58 billion new shares will be issued in the whole share issue.
Sumitomo is buying shares at 296p each, while for the remaining £4 billion "open offer", new and existing investors are being offered shares at 282p - a 9.3% discount on yesterday's closing price.
Mr Varley said today the bank would welcome its investor base taking part in the shares offering.
"The overwhelming majority of this offer is available for subscription on the same terms as it is for our existing shareholders," he said.
"If they choose to come in, we would welcome that and if they choose not to, then we have our anchor investors."
Details of the share placing are set to be sent out in a prospectus later today, with shareholders given until July 17 to register their interest.